# The Mortgage Credit Directive Order 2015, Paragraph 16: Early repayment


(1) Subject to sub-paragraph (3), the creditor must allow the borrower to discharge fully or partially the borrower’s obligations under the consumer buy-to-let mortgage contract prior to the expiry of that contract.
(2) Where the borrower discharges, fully or partially, the borrower’s obligations prior to the expiry of the contract, the creditor must provide the borrower with a reduction in the total cost of credit to the borrower, consisting of the interest and costs for the remaining duration of the contract.
(3) The creditor may provide that the exercise of the right referred to in sub-paragraph (1) is subject to one or more of the following conditions—
(a) time limitations on the exercise of the right;
(b) different treatment depending on the type of borrowing rate or on the moment the borrower exercises the right;
(c) restrictions with regard to the circumstances in which the right may be exercised; or
(d) if the exercise of the right falls within a period for which the borrowing rate is fixed, the existence of a legitimate interest on the part of the borrower.
(4) The creditor is entitled to fair and objective compensation, where justified, for possible costs directly linked to the early repayment but the creditor must not impose a sanction on the borrower and the amount of compensation must not exceed the financial loss of the creditor.
(5) Where a borrower seeks to exercise the right referred to in sub-paragraph (1), the creditor must provide the borrower without delay after receipt of the borrower’s request, on paper or on another durable medium, with the information necessary to consider whether to proceed with the exercise of the right.
(6) The information referred to in sub-paragraph (5) must include—
(a) a quantification of the implications for the borrower of exercising the right; and
(b) any assumptions used by the creditor in making that quantification.
(7) The assumptions referred to in sub-paragraph (6)(b) must be reasonable and justifiable.

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Source: https://www.legislation.gov.uk/ukdsi/2015/9780111130810/schedule/2/paragraph/16 (the official version)
Page: https://openlegislation.uk/draft-mortgage-credit-directive-order-2015/schedule-2/paragraph-16
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.